We think that the massive coordinated fiscal and monetary policy response from European authorities should ensure the Euro Area is well equipped to rebound better than most from the pandemic. This, we believe, is likely to be supportive of the euro in the coming months.

Trump hints at fresh China sanctions

This afternoon will see a slew of economic data out of the US. Weekly jobless claims data remains one of the most vital pieces of macroeconomic news on tap, so investors will be closely watching its release for signs that the rate of jobs lost is easing. Revised Q1 growth data could also prove a market mover, as could the latest durable goods order data for April – the first full month of lockdown.

Aside from that, news headlines about the ongoing US-China trade spat will remain at the forefront. President Trump has warned that he will be announcing ‘very interesting’ action against China this week, raising the possibility of fresh sanctions being imposed by the US on Chinese businesses. Should we see the announcement of significant new measures this week, we could see a reversal in the recent ‘risk on’ mode witnessed in the past week, causing investors to once again favour the dollar and sell higher risk emerging market currencies.

Investors will also continue to be watching the latest virus numbers and news on an easing in lockdowns across the globe.